TY  - GEN
AB  - How should we make value judgments about wealth inequality? Harsanyi (1953) proposes
to take an individual who evaluates her well-being by expected utility and ask her to evaluate
the wealth possibilities ex-ante (i.e. before she finds her place in society, i.e., under the \veil
of ignorance" of Rawls (1971)) assuming that she will be allocated any one of the possible
wealth levels with equal probability. We propose a different notion of how wealth levels
are allocated, based on a competition or contest. We find that inequality can be captured
through the equilibrium properties of such a game. We connect the inequality measures
so derived to existing measures of inequality, and demonstrate the conditions under which
they satisfy the received key axioms of inequality measures (anonymity, homogeneity and
the Pigou-Dalton transfer principle). Our approach also provides a natural way to discuss
the tradeoff between greater total wealth and greater inequality.
DA  - 2014
KW  - utilitarianism
KW  - inequality
KW  - contests
LA  - eng
PY  - 2014
SN  - 0931-6558
SP  - 21-
TI  - Efficiency based measures of inequality
UR  - https://nbn-resolving.org/urn:nbn:de:0070-pub-29015976
Y2  - 2024-11-22T04:30:35
ER  -